On June 7, 2013, Mark Gongloff writes on The Huffington Post:
We are at a place where 175,000 new jobs per month is widely considered “good” job growth. According to a new Fed study, it won’t be very long before merely adding 35,000 jobs per month is good enough.
In other words, enjoy this lousy labor market, because this might be just about as good as it gets in terms of job growth.
In their latest newsletter, economists with the Chicago Federal Reserve estimate that, given the number of people leaving the labor force, it should only take about 80,000 new jobs to drive the unemployment rate lower. By the year 2016, that number will fall to just 35,000. In the past, the rate of job growth necessary to lower unemployment was more like 150,000 jobs.
Careful readers of the latest news might be confused right now, recalling that just on Friday the Bureau of Labor Statistics said that non-farm payrolls grew by 175,000 jobs in May, but the unemployment rate actually went up, to 7.6 percent. The stock market cheered the 175,000 new jobs, which was better than economists had expected.
Does that mean the Chicago Fed is already wrong about its thesis? If we only need 80,000 jobs to get unemployment down, then why did unemployment go up when we got more than twice that many jobs?
One answer is that the two numbers — payrolls and unemployment — are based on different surveys. They aren’t always consistent month to month. The payroll number comes from a survey of employers, while the unemployment rate comes from a much smaller survey of households. The payroll numbers will also probably be wildly revised in the months and years to come.
The Chicago Fed is trying to figure out long-term trends in the economy, rather than trying to predict the noisy month-to-month swings in the data. One reason unemployment rose in May was that 420,000 workers decided to poke their heads into the labor market to see if there was any work available, making themselves eligible to be counted as “unemployed” when they didn’t find it. If that trend continues for a while, we could see unemployment rise a bit, even if decent job growth continues.
Yet another analysis believing that decent job growth will occur. As long as there exists the exponential disassociation of production and consumption, job growth will be stagnate. We need to build a FUTURE economy that provides general affluence for EVERY American through the opportunity to acquire and own a viable, wealth-creating, income-generating capital estate. Ordinary citizens must gain access to productive capital ownership to improve their economic well-being.
The reality today is that the system systematically concentrates more and more capital ownership in the stationary 1 percent ranks. Yet the 1 percent are not the people who do the overwhelming consuming. The result is the consumer populous is not able to get the money to buy the products and services produced as a result of substituting machines for people. What job opportunities that would otherwise result from increased demand never materialize because the masses are propertyless in terms of productive capital assets, and do not share in the income generated by those assets. Instead, greedy rich people manipulate the lives of people who struggle with declining labor worker earnings and job opportunities, and then accumulate the bulk of the money through monopolized productive capital ownership.
While the American economy is ripe with the physical, technical, managerial, and engineering prerequisites for improving the lives of the 99 percent majority, there is a crippling organizational malfunction that prevents making full use of the technological prowess that we have developed. The system does not fully facilitate connecting the majority of citizens, who have unsatisfied needs and wants, to the productive capital assets enabling productive efficiency and economic growth.
The answers are to be found in the proposed Capital Homestead Act at http://www.cesj.org/homestead/index.htm and http://www.cesj.org/homestead/summary-cha.htm, and the Agenda of The Just Third Way Movement at http://foreconomicjustice.org/?p=5797
